Hifn Expands Into China
Security-chip company Hifn Inc. (Nasdaq: HIFN) is continuing its expansion drive by setting up a subsidiary called Saian Microsystems in Hangzhou, China.
Saian, which launched earlier this month, consists of 14 engineers who will work on Hifn's next-generation products. Offshoring? Not really; it's more a case of personal contacts.
The engineers are all Chinese, and the company's principals have all worked for Kamran Malik, Hifn's vice president of engineering, in Silicon Valley at one stage or another for as long as ten years. The group returned to China to set up a company called C-Sky Microsystems, designing processors for Chinese customers. Now they've moved to Saian.
This is the second part of Hifn's sudden push into China. In February, the company teamed with Zhejiang University in Hangzhou to establish a network security lab. One of Hifn's benefits for funding the project is the university connection, which could provide a source for future China-based employees, Malik says.
"There are some significant customers we were beginning to [engage] in China, so we thought it would be a good idea to do some significant development there," Malik says.
Hifn announced its second-quarter results yesterday. For the quarter, which ended in March, Hifn reported revenues of $10.4 million and losses of $2.6 million, or 20 cents per diluted share, compared with revenues of $4.5 million and losses of $5.3 million, or 50 cents per share, for the same quarter in 2003 (see Hifn Reports Q2 Loss, China Sub).
Early this year, the company picked up IBM's PowerNP network processor line, which brought in $2.1 million for Hifn this past quarter (see Hifn Acquires IBM's PowerNP Products).
"Hifn is gearing up for growth," writes Dushyant Desai, an analyst with CE Unterberg Towbin, in a note issued this morning. "We believe HIFN will achieve profitability in the September ’04 quarter."
— Craig Matsumoto, Senior Editor, Light Reading